Before The Cash Auctions For Beginners

The purpose of this particular article is to give you a different take of the auto industry. Most of my articles primarily focus on multiple concepts pertaining to cash auctions and how to flip wholesale vehicles you buy from these type of locations. For this particular article I decided to take a step back and focus on another part of the industry I get asked about from individuals who are new to the auto industry. On a daily basis I receive multiple emails asking how I got started and is it possible to sell multiple vehicles without a dealer’s license in order to make income. The individuals that usually ask me this question have desires to become licensed brokers and/or dealers but they have limited funds and time. I’m a firm believer we all started from somewhere in this industry so I would like to explain what I would call the underground practice not really spoken about in the mainstream dealer/broker industry. The practice I’m referring to is private individuals buying and selling without a dealer and/or broker license. This isn’t really an uncommon practice or unknown to many people but what’s not known is how you can sustain a profitable side income if done carefully and correctly. The private individual seller in our industry also goes by the name of curbstoning.

On other forums or websites you may find different meaning on what exactly curbstoning means and why the professional side of the industry frowns on the practice. This is the standard industry meaning on this concept you can find online. (Curbstoning is the sale of used vehicles by unlicensed dealers who pretend to be private parties in order to evade regulation. Their customers often get saddled with damaged, dangerous, or uninsurable vehicles – by which time the curbstoner is long gone with their cash.)

Now let me give you my version of what this means to those of us who really understand the industry market. Private selling aka curbstoners simply means individuals who are selling vehicles past the legal limits of their particular State, this is where that unlicensed dealer applies. In most States the maximum amount of cars you are allowed to sell as an individual can range between 5 to 8 sales per yr. After you reach that amount an individual is supposed to stop and simply wait until the follow year to duplicate the same process. But as with everything else in business you can always find a loophole so in this market the private sellers who really are serious in making money figured out some ways to keep going past the State mandate.

To continue dissecting this industry definition of a curb-stoner when it states individuals also do it to evade regulations; listen, all industries from Microsoft, Johnson & Johnson, Walmart, and Dell just to name a few all find ways to evade regulations in order to either save money and/or cut corners. Can anyone say off shore employment.

Moving on with the dissection; Private sellers aka curbstoners sell bad vehicles and they are long gone with the money. Independent car lots do the same practice the only difference is they lock you in with a non-cancellable contact. Yes you can go back and get certain things repaired but in the used car market the warranties are very limited to certain items and trust me you are paying for that warranty in your overpriced vehicle especially if you are doing a buy here pay here setup. I’ve came across many people paying for car notes on vehicles and the car was sitting in the driveway due to mechanical issues. Now please don’t get me wrong, do I fully endorse those bad apples that are curbstoning? The answer is no, but if an individual who’s non-licensed is selling quality vehicles and the customer is able to register such vehicle with no issues then who can complain. This is just my professional opinion, the core problem just like with any other industry is we have a select few powerful dealerships who have strong influence in how policy are written and usually the companies or individual that are effected are the little guys.

I have to admit I would be a hypocrite to sit here and say what private sellers are doing is wrong and they shouldn’t be doing this type of practice at all. I understand everyone needs to start from somewhere and from my own personal experience when I asked a few of these sellers in the past why wouldn’t they consider just simply getting licenses properly so they don’t have to take such risk. The common answer I get is money and time. See the mindset of these individual are if they can buy vehicles in the private market on their limited budget and don’t have to run to cash auctions which mainly have sales during the work week why not simply take the route of finding vehicles online from private seller and sell them back for profit. Most will tell you attempting to gain a dealer and/or broker license isn’t really feasible to their household budget and even if they attempted the task it would be very difficult to leave that full time job that keeps food on the table and the lights on in the house in order to run up and down the road to various auctions. In all honesty when this is expressed to me I really can’t argue.

So with that being said for those of you brand new to this industry who are trying to figure out a way to make some side income to support your household this article is exactly for you. But before I begin my details hopefully down the road when you’re in a better position you would at least consider joining up under another dealer which I spoke about in my article (How to gain access to cash auctions) and eventually obtain your own broker license and company. Though the basic techniques I’m about to share could make you some solid income the risk will always be present of curb-stoning. So be mindful and plan your business endeavors carefully. Also I will talk briefly about a program called F1 Autocash formula later in the article that specifically caters towards this concept. It’s a good program for beginners and worth every penny being a member, so make sure you take a look over the details.

The Private Seller Industry:

Who does this industry cater to?

• This industry are for those on very limited budget usually between $500 to $1000 in pocket.

• Works a 40 to 50 hour work week and may only have free time during the weekends. Personal Credit score below 570, I needed to ad this because obtaining a decent quote for your insurance and bond for a dealer or broker license with a score below 570 makes it extremely difficult to obtain. Without those two items it’s impossible to get license properly.

How do you find inventory to buy?

• You can drive around in your local neighborhood and come across for sale signs on individuals vehicles sitting in front of their house, but I would say don’t do it, that’s a waste of time. What you want to do is look online in particular Craigslist and possibly Ebay Classified. But for the purpose of this article let’s focus on Craigslist since this is the king of free online classified and where everyone post vehicles for sale.

What type of vehicles should you look to buy?

What you should look for first starting out are vehicles 12 to 17 years old so as of the writing of this article anything from a 1999 model up to 2004. Now this is based on a Maximum budget of $800. If your budget is higher then you can adjust accordingly.

Another beginner’s mistake is choosing the wrong vehicles starting off on a limited budget such as; Honda Accord’s, Toyota Camry’s, or Nissan Maxima’s. If this is you, then stop. It’s not practical due to these three model are the most sought after vehicles in the market anywhere in the US. With that out the way what should you be looking to buy? My suggestion American made vehicles. Such as a Chevy Impala, Ford Taurus, Dodge Intrepid, or Pontiac Grand AM. There are a few more choices in the American models I could name but I wanted to stick with the more popular sought after brands.

If you are stubborn and you have to stay with an import than my recommendations would be a Mazda 626, Hyundai Elantra, or, Mitsubishi Lancer. As I stated with the American models you may come across a few other imports but the 3 vehicles I just mentioned across the board would be the least expensive on Craigslist.

Ok now that you located these models on craigslist how do you filter them?

• My suggestion go with the oldest dates first. If you see one of the mentioned vehicles above on Craigslist for an asking price of $1000 to $1200 with a best offer attached and the ad has been online 20days or older and actually still for sale it’s a good chance you could offer $800 and possibly get the vehicle with an asking price of $1000 to $1200, buy this time sellers are more eager to get rid of the vehicle.

• Another option is reading through every post and locate desperate sellers in need of cash. You will see ads on Craigslist that will say. I’m selling my XYZ vehicle for XYZ price quick sale, needs to be gone by the weekend. Another ad you will see from time to time is someone saying they are in the process of moving and they are unable to take the vehicle with them so they need it sold before they move.

• Also I need to include the mechanical/handyman specials. In my opinion this is where you will find the majority of private owner vehicles below $1000. Now the issue will come down to how well your mechanicals skill are and if you can do repairs in a timely manner. I would also suggest anything with Transmission and/or Engine issues avoid because it’s simply to expenses and not worth the time. But sometime you will come across inexperience sellers thinking the vehicle has a major issue but in hind sight it’s not and you can get a steal due to their lack of mechanical knowledge.

What type of mechanical special deals should a beginner in this industry with basic repair skill consider taking on while looking for inventory on Craigslist?

Here is my basic suggestion list;

• Vehicles with brake problems; the common cause: worn pads, drums, calibers, or brake lines

• Slight overheating: meaning you can run the vehicles for 20 minutes and the temp gauge is slowing sliding towards the overheat line. If it’s overheating quickly I would avoid. Common Cause for slow overheating: Clogged radiator/thermostats, Bad water pump.

• Bad steering: front tire rods off- Need a major wheel alignment

• Sluggish acceleration: Common case: Bad plug, distributor and /or coil packs- Needs Major tune up

You will surely come across a few other problems but these always seems to be some of the common issues why it’s a mechanic special and those sellers who either don’t have the time or money will surely want to get rid of these vehicles.

• Another Idea: This will take a little time and careful planning: Locating a broker who has vehicles they purchased from auctions but the vehicle ended up having issues and they are trying to figure out what to do with it. This concept will work if you can connect with a straight forward broker and/or dealer who won’t mind given you a deal on something they have picked up at a sale for $400 to $700 and they simply tack on an additional $200 to make a tiny profit and pass the vehicle onto you so you can go ahead and finish the repairs. Only warning I will say if you decide to take this direction you make sure you’re fully knowledgeable about the vehicle and make sure the title work is easily transferable once you’re ready to sale. Remember the title will be in the broker and/or dealer’s company name so make sure you have any supporting paperwork needed so you customer won’t have any issue at DMV

Now that I gave you four areas to focus on in order to find a deal in the private market that you can buy cheap enough and simply do some mechanical work if needed and a good detail then turn around and sell for profit.

Next I need to briefly talk about how to ask the correct questions when calling sellers on Craigslist:

1st: Always ask for the miles on the vehicle: most time vehicles on the cheaper end seller won’t put the miles on Craigslist so not to scare away potential buyers, or they will put the miles on the ad but give you a different answer over the phone.

2nd: Ask if the vehicle has a clean or salvage title. If it’s a salvage title you may want to reconsider buying unless you have the proper setup in order to make that salvage title easily transferable to a rebuilt title

3rd: Ask if the vehicle has current registration and in some states current emissions. Even though this isn’t a major make or break in the deal having this info give you some ideas if the vehicle has been sitting somewhere for a long time or will need repairs to pass emissions

4th: Ask if they have a Carfax or AutoCheck report on the vehicle. If they say no I would get the vin# so you can check for yourself

5th: Ask if vehicle has any noticeable problems. Many seller won’t post the issues of what they are selling online.

6th: Ask the seller exactly where they are showing the vehicle. If it’s at their house I wouldn’t bother going under regular conditions. Now if it’s a mechanic special that’s a different story if you need to go to their home. I would just be careful.

The Inspection:

You found the vehicle, spoke to the seller, and agreed on location to view the vehicle.

Here are my basic tips on inspecting the car.

(Also let me make a special note: You should have a code reader on hand and a jump starter).

You can view my other articles to get details on these items or if you're already familar with these items you can click here for the jump starter and here for the code reader to see my top recommendations on both products with prices. The code reader in particular will be a life saver for your pockets so you will be able to scan if a vehicle has any issues coming up in its computer system because I’ll make a solid bet most vehicles you view will have a check engine light displayed.

Inspection tips:

1st: When the seller pulls up let the car run idle for another 7 to 10 minutes. While doing this push on the gas pedal up to 2.5 RPM’s on and off for at least 5 minutes, the RPM rate is the equivalent of doing around 55 mph on any given highway. While doing this keep your eye on the temperature gauge to see if the needle goes past the halfway point that could be a sign of overheating issues

2nd: After you do the overheating test go immediately under the hood and look for any pockets of smoke anywhere. If you see any that’s a sign of an oil leak and/or antifreeze is dripping on a hot pipe

3rd: Check all the windows, heat/AC, break lights, and windshield wipers. You will be surprised how many individuals in the private market industry never check the wipers

4th: Test Drive: When you’re test driving make sure the radio volume is low or off. You want to hear any weird noises and also listen for the breaks and suspension system.

5th: After test drive is done turn off the vehicle and turn it back on. Do this at least 3 times to check for any starter issues. Then finally roll down one of the windows turn off the car and lock all the doors to see if the key(s) you have actually unlock the door and the trunk. Also while you have the trunk open look for the spare tire and any clues the seller may have left inside such as multiple antifreeze and/or oil containers this could also be a clue of hidden issues.

Now don’t get me wrong when you are shopping in this price range you automatically need to have the mindset that the vehicle you’re viewing will have some issues. AS long as it’s nothing major, going back to my transmission and engine suggestion the vehicle might be worth considering buying.

Outside of tranny and engine issues the only other vehicles I would avoid are those with mid to major body damage.

Now I gave you some basic suggestions on how to locate vehicles in the private market, and advice on inspection. The last part is now selling your finish product. How do you go about selling your vehicle as fast as possible?

In my personal experience there are two ways you can go about completing this process.

1st way the traditional buy and sell technique. Meaning you did the first two steps, the car is now cleaned and ready to put up online for your final asking price.

2nd way is what I call pre-marketing. Let me explain by an example. You’re on Craigslist and you see a 2001 Chevy Impala with 198K miles for $1100 or best offer. The seller actually explains the issues if any and you see you can get it in your budget or hopefully below. Most individuals would run out the door to go look at the vehicle. But the alternative even before you run down the road is simply pre-market the same vehicle. This is what you do. Go back to Craigslist but this time go to another State and lookup the same vehicle. Example: I live in Atlanta, GA so I would look in TX, CA, & FL, locate another 01 Impala with the same color if possible, if not, simply locate one the same year and close to exact features to the one you possibly want to buy upon inspection. Make sure it doesn’t have any plates on the pictures or odd surroundings. The car would need to look clean inside and out. Take the photos from the ad and save it to your computer. Next I would put up a mock ad on craigslist with the same details as the vehicle you’re about to view with an asking price of approximately $1900. If it’s possible wait for another 24hrs and see what type of response you get. If you’re receiving multiple calls and/or text messages of at least 3 or more responses that tells me I have something worth looking into. From that point I would go view the car.

The marketing suggestion now that you vehicle is ready for sale:

The most obvious location is Craigslist. The posting part I won’t take much time on because I assume you can figure out the wording. But the part I do want to mention is tagging your ad. Here is an example of what I mean by a tagging your ad which I phrased keywords.

The purpose of these tags is to make your ad go across different boards on Craigslist others could see even if they are looking for different models. This is an excellent cross sell technique.

Other online sources you can duplicate your marketing campaign is with the phone apps called; 5miles, Letgo, and Offerup. These are excellent websites worth looking into if you’re not familiar with them.

Finally I would like to briefly discuss a source that can give you more in depth assistance in the private party buying industry. The author has been doing this technique for years and I must admit is very good at the features. He has a 100+ page eBook available, or, the eBook with multiple video training modules where he actually shows hands on deals he personally has done that follows along with the book.

(CLICK IMAGE FOR DETAILS)

The name of the course as mentioned earlier in this article is called F1 AutoCash formula. You can click here to begin obtaining the information. The article I provided here is simply scratching the surface of private party buying and selling. I wanted to give you a starting point because when I first began this business in the cash auction industry I myself was selling vehicles on the side by simply cherry picking cars off craigslist and a few other websites and sold them for a decent profit. It had its good side but over time I wanted a better buying source.

I purchased the AutoCash course a few years ago when I was in transition from private buyer and selling to getting my own dealer’s license . Because of continuous pressure from the State beginning to figure out what I was doing I simply decided to get licensed to avoid any major headaches. But If I did decided to stay in the private party market this F1 AutoCash setup would have been my blueprint to be able keep making money. You can also do some independent reviews online to see what I’m saying is true. This information was very helpful to me years ago while I was in transition to obtain my dealers license and some of the information provided in his course work gave me knowledge of what to prepare for in order to obtain my dealer’s license. Without his support I know getting the additional money needed to get my license compete would have been almost an impossible task.

https://www.youtube.com/watch?v=Gx3dit0z1Ec

As always I hope this article helps someone trying to figure out how to make income in the overall auto industry. Please leave me your comments if you have any additional questions. Good luck with your business venture.